Video game sales top $21 billion in 2008

NEW YORK -- All throughout 2008, as the economy went from bad to worse, video games continued to sell at record levels, boosted by the popularity of the Nintendo Wii and blockbuster games like "Grand Theft Auto IV."

Still, there are some signs that the recession is nipping at the heels of video games. The priciest console, Sony Corp.'s PlayStation 3, continues to lag behind its less expensive rivals, the Wii and Microsoft Corp.'s Xbox 360.

According to data from market researcher NPD Group, Americans bought $21.33 billion worth of video game systems, software and accessories last year. This is a big jump from the previous year's roughly $18 billion, but slightly below the $22 billion that NPD had estimated as late as November.

"While industry growth has not continued at the blistering pace we saw during the second and third quarters, December's 9 percent increase over last December brings the year in 19 percent ahead of last year, and sets a new record for total industry sales," said NPD analyst Anita Frazier in an e-mail statement.

December marked the first time that the gaming industry's revenue topped $5 billion in a single month, she noted. In comparison, it took all of 1997 to hit industry sales of $5.1 billion.

While the Wii, with its easy-to-use motion controller and playful titles, has been basking in the spotlight since its 2006 launch, Nintendo's portable DS was the best-selling gaming system in December, topping 3 million units. The Wii, meanwhile, sold about 2.2 million units, up roughly 5 percent from November's levels.

November and December are crucial months for video game companies, because they make the bulk of their money during the holidays.

Denise Kaigler, vice president of corporate affairs at Nintendo, called December "another strong month" for the Wii. The console has been plagued by supply shortages even though Nintendo has to boosted production several times. On Thursday, the console, along with the exercise game "Wii Fit," was sold out on Best Buy's Web site.

In July, Nintendo upped production of the Wii by 50 percent, and now churns out 2.4 million consoles each month worldwide. Kaigler said Nintendo is "constantly feeding" its retailers, and getting the consoles into everyone's hands who wants one is a priority.

Total hardware sales climbed 2 percent in December, to $1.88 billion. In third behind the Wii and the DS was the Xbox 360, which sold 1.4 million units, up 14 percent from December 2007. Microsoft spokesman David Dennis said the Xbox business is meeting, and in some cases, such as its Live online service, exceeding expectations.

The PlayStation 3 sold 726,000 units, down 9 percent from December 2007. Its predecessor, the nearly 9-year-old PlayStation 2, sold 410,000. Peter Dille, a senior vice president at Sony, said in a statement the company remains "confident in our momentum into 2009."

Software sales jumped 15 percent in December to $2.75 billion, led by "Wii Play," a game launched in February 2007 that comes with an extra controller for the Wii at no extra cost.

Activision Blizzard Inc.'s "Call of Duty: World at War" was the month's second-best selling game, followed by the "Wii Fit."